Greetings, and welcome to Installed Building Products Fiscal 2024 Second Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Darren Hicks, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to Installed Building Products' second quarter 2024 earnings conference call. Earlier today, we issued a press release on our financial results for the second quarter, which can be found in the Investor Relations section of our website. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are based on management's current expectations and beliefs. These statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those described today. Please refer to the cautionary statements and risk factors in our SEC filings, including our annual report on Form 10-K. We undertake no duty or obligation to update any forward-looking statement as a result of new information or future events, except as required by federal securities laws. In addition, management refers to certain non-GAAP and adjusted financial measures on this call. You can find a reconciliation of such measures to the nearest GAAP equivalent in the company's earnings release and additional reconciliation for EBITDA and adjusted EBITDA for earlier fiscal years in our investor presentation, which are available on our Investor Relations section of our website. This morning's conference call is hosted by Jeff Edwards, our Chairman and Chief Executive Officer; and Michael Miller, our Chief Financial Officer; and joined by Jason Niswonger, our Chief Administrative and Sustainability Officer. I will now turn the call over to Jeff.

Thanks, Darren. Good morning to everyone joining us on today's call. As usual, I will start the call with some highlights and then turn the call over to Michael, who will discuss our financial results, and capital position in more detail before we take your questions. During the second quarter, we began the process of winding down the operations of a single branch that installed non-core building products into newly constructed commercial structures. We believe that excluding the financial results of this branch from our typical income statement metrics is useful in understanding and evaluating the results of our ongoing operations, as it is noncore. As such, all income statement figures mentioned on this call exclude the aforementioned branch results and are thus net of dispositions. Our second quarter sales results continue to reflect fundamental improvements in our single-family end market, relative to the last 12 months and good sales growth in our multi-family end market. We believe our customers are committed to meeting new construction homeownership demand by continuing to build new single-family homes in the current macroeconomic backdrop. We expect our multi-family backlog to keep branches in core geographic markets busy in the near term, despite ongoing industry headwinds as it relates to multi-family unit starts. Longer term, we believe opportunities in our multi-family end markets remain attractive. I'm encouraged by the positive same-branch sales growth we achieved in our single-family end market. The nearly 8% year-over-year increase during the quarter was the strongest increase in same-branch sales since the fourth quarter of 2022. Single-family sales growth was supported by a growing proportion of sales from national production builders in the quarter. Our deep customer relationships, local market knowledge, and ability to align our pricing with the value we offer our customers were key to our second quarter…

Thank you, Jeff, and good morning, everyone. As Jeff noted earlier, all income statement references in my comments are net of dispositions. Consolidated net revenue for the second quarter increased 8% to $740 million compared to $687 million for the same period last year. The increase in sales during the quarter was driven by growth in our new and existing residential markets. Our single-family same branch sales increased 8%, while our multifamily same branch sales increased 5% during the second quarter. Although the components behind our price/mix and volume disclosure have several moving parts that are difficult to forecast and quantify, we continue to experience top line improvement from a 6.4% increase in price/mix during the second quarter, which more than offset modestly lighter job volumes, down 1.4% relative to the second quarter last year. Our business achieved strong results in the second quarter, as measured by an adjusted gross margin of 34.9%, adjusted net profit margin of 11.6% and adjusted EBITDA margin of 18.5%. Adjusted selling and administrative expense as a percent of second quarter sales was 18.3% due to higher variable compensation related to higher gross profit and EBITDA performance from the prior year period. Within that result, administrative expenses, excluding variable compensation, in the second quarter of 2024 was flat with the first quarter of 2024. Adjusted EBITDA for the 2024 second quarter increased 11.3% to a record $136.6 million, and adjusted EBITDA margin improved to 18.5% compared to 17.9% for the same period last year. We continue to target full year long-term same-branch incremental adjusted EBITDA margins in the range of 20% to 25%. For the 2024 second quarter, total same-branch incremental adjusted EBITDA margin was 29%. Adjusted net income per diluted share improved 14.5% to $3.02 per share. Although we do not provide comprehensive financial…

Thanks, Michael. I'd like to conclude our prepared remarks by once again thanking IBP employees for their hard work, dedication and commitment to our company. Our success over the years is made possible because of you. Operator, let's open up the call for questions.

[Operator Instructions] Your first question comes from Stephen Kim with Evercore ISI. Please go ahead.

Thanks very much, guys. Thanks for all the color. But as usual, we have additional questions. I guess my first one was, if you could speak to any verticals that maybe slowed a little bit in the quarter that's worth calling out or maybe missed your internal projections, any verticals? And then broadly, when we think about fiberglass, curious if you could talk about how the price pass-through is going. My sense is, it's going well, but wanted to get your sense and then also, what you think the potential is for a third increase this year?

Stephen, good morning. This is Michael. So, on the first part of that question relative to the verticals, I would say that all lines of business, all end markets, performed very much in line with our expectations. But as we had highlighted in previous quarters, clearly, the weakest part of the business right now is the light commercial business, which naturally cycles behind single-family development. So, we would expect, as we go into the latter half of this year and early part of next year, given the strength that we've seen in single-family that, that business would start to recover. But I would say that across the board, the business performed as expected from a revenue perspective and actually performed better than we expected from a gross margin perspective. I don't know if you want to talk to that.

Yes. Stephen, this is Jeff. In terms of material, material tightness and pricing, it is still a very tight market. We expect it to continue to stay that way probably through the end of the year. Obviously, it's an environment in which manufacturers have been able to realize price and it's one in which where we try to at least make up the ground that we need to make up. I can speculate as to whether there's a third one or not, it's a little late in the year, I suppose. So maybe I won't speculate.

Okay. Great. That's fine. I guess, Mike, you talked a little bit about the incentive comp. I assume that was maybe weighing a little bit on the incremental -- organic incremental EBITDA margin. Wondering if there was anything else maybe to call out because that came in a little lower than we were expecting. And then, with respect to the HUD mandate on single-family, the Energy Code HUD mandate, which is coming next year. I guess, I'm just curious to hear if you could address that and your thoughts around that. We've been getting questions as to whether or not we might see FHFA follow on. And there's been also questioning around whether or not all of this just may disappear, maybe due to the Chevron -- the ruling around the Chevron. I don't know what the word is, but you know what I mean by the Chevron case. And then, the potential for us that a Republican suite maybe just undo all this. So, just curious if you could talk about the HUD mandate broadly.

I mean, as far as we know, and as far as everything that we've heard that the process is continuing. We believe that there might be some push back relative to the timing of implementation, but, it's very difficult for us to speculate what would happen in a change in the political environment. So, as far as we know and as far as our customers are working, we're all sort of working towards this getting put in place, and ultimately, it still benefits the builder, because they have the tax credit that will more than offset the cost of going to the '21 Energy Code. So, that, I think everyone believes is going to stay and will still continue to be available. So it does make economic sense for them and obviously for the homeowner as well. So, we think regardless of the political outcome that logic and economics will continue to push forward, getting more builders building to the '21 Energy Code. In terms of your margin question, adjusted gross margin and both adjusted EBITDA margin and all of our comments are net of dispositions. We're very strong from our perspective, quite frankly. And the selling -- adjusted selling and administrative leverage, that was higher, I should say that the costs that were higher on a relative basis to revenue was really all driven by variable compensation. And if you look at it on a quarter -- three quarter basis basically, that number has been quite in line for the past three quarters as a percentage of revenue. And if you look at just G&A dollars, excluding variable compensation, right? They've been flat for the past couple of quarters.

The only thing I'd like to add on the 2021 Code is, I mean, backing up from the politics for a moment, it wasn't created just kind of willy-nilly. It's created because, it's good for the environment and it saves energy ultimately. And it's been -- it's well known that from -- in terms of insulation as kind of the payback as it relates to home energy costs and kind of the effects of -- against the environment that the insulation is probably, if not the most effective way to combat some of those things. It's certainly up there in the top tiers.

Okay, great. Thanks very much, guys. Perfect.

Next question, Adam Baumgarten with Zelman & Associates. Please go ahead.

Hi, guys, thanks for taking my questions. First, on multi-family, just kind of how we think about the back half of the year. It's decelerated a bit, but still positive. Maybe, do you expect positive same-store sales growth in multi-family in the back half at this point?

Well, as you know, we don't provide guidance. But I would say a couple of things on the multi-family side. The backlogs are still at a highly elevated level. So one of the things that we look at are units under construction relative to starts. And if you look at that on a single-family basis, it's currently running somewhere around seven to eight months, which is consistent with kind of long-term trends, sort of pre-COVID. So, we would say that cycle times have completely normalized in single-family, maybe improved a little bit above normal in single-family construction market. On multi-family, as I think everybody on the call is probably aware, the units under construction or the backlog continues to be quite elevated. Normal in that market would be more like 20 to 23 months of starts. Currently, it's running around 28 to 29 months of starts. So, construction or units under construction still need to come down probably 25% to 30% to normalize, given the current starts level. And that creates a significant headwind for the industry and for us. We feel good about our ability to continue to gain market share and improve the cross-sell of other products in multi-family. But clearly, that significant of a readjustment in the units under construction is going to have an impact on our multi-family sales. I would say that the -- what's maybe changed from our perspective relative to that is we think that the normalization of the units under construction is going to happen sooner than we may have expected, say, three to six months ago. But that also means that we'll come to a stabilization period sooner than we had expected, meaning that we will be able to then focus on just continuing to gain market share and seeing revenue growth in multi-family from market share gains versus overall market growth. So, that is a long-winded way of not answering your question, but -- because we don't provide guidance. But I do think, you said there is a good chance that if multi-family units under construction comes in for the full year between 600,000 and 700,000 completions that we will get to that more normalized 20 to 23 months, which in essence then creates a stable operating environment for multi-family construction.

Okay. Got it. Now, that's helpful. And then just on the disposition, maybe just a little more color on what that non-core product line was. And then if we think about the rest of your footprint, any other opportunities or plans for additional dispositions?

Absolutely not. All of our other branches are performing to our expectations or even exceeding our expectations. This was a one-off deal that obviously, in hindsight, we wish we hadn't done. It is a noncore product. We really don't install it in any of our locations and it was into the commercial and multi-family vertical. And, the good news is, it's behind us now.

Okay. Thank you.

Next question, Michael Rehaut with JPMorgan. Please go ahead.

Hi, thanks. Good morning, everyone. Wanted to hit first on the gross margins. You're talking about, basically, the last four, five quarters now, plus or minus 34%, which is solidly above your long-term or longer-term goal, where I think 32% that -- I guess long-term outlook 30% to 32%. So it seems like you're consistently exceeding that. And I think a quarter or two ago, you kind of alluded to likely strength in this metric, perhaps continued strength around these levels, maybe through the end of this year. And again, not giving forward guidance, but not necessarily -- but basically kind of saying there's no drivers that would necessarily push this down materially from current levels in the near term at least. I was wondering if that is still your thought around this metric that this 34% level can persist. I know you've talked about maybe negative mix starting to eat away at this metric. But any thoughts around the next several quarters, what might push it lower or do you feel perhaps a little increasingly comfortable that this level can be maintained in the near to medium term?

Yes, thanks for that question. What I would say around gross margin is that adjusted gross margin in the quarter, net of dispositions, was 34.9%. So let's just call it 35%. And you're right, in the previous quarters, we've been running around 34%. So we certainly don't expect it to go above the 35%. But to say for the near term, and really for the back half of the year, where it should be more in the 32% to 34% range as opposed to the 30% to 32%, I think, is reasonable. We have had in the quarter "mix headwinds" as we've talked on multiple quarters about the impact of the growth in production builder business. I would say that we've been doing an excellent job improving the efficiency of completing jobs for the production builders, which has been helping gross margin improvement as it relates there. We had very strong growth with the production builders in the quarter. Our sales to the production builders was up approximately 20% in the quarter with production builders and about 5% with regional and local builders, which is actually consistent with what we've been talking about, that the regional and local guys were going to have a good year, but nothing in comparison to what the production builders had and that the vast majority of the growth in starts would be coming from their production builders, and we're certainly seeing that play out. But I think it's reasonable to assume that for the near to medium term that there is certainly going above the 35% is probably not likely, but staying in a 32% to 34% range for the near to medium term is reasonable.

Great. That's very helpful. Appreciate that. I guess second question, maybe just around the M&A backdrop. You've kind of highlighted doing about $50 million in annualized revenue so far year-to-date. Last year, you kind of missed the $100 million target by a little bit. How would you characterize the pipeline and the opportunity set in front of you today maybe versus six or 12 months ago. I think if I recall right, you kind of reiterated the $100 million of outlook for this year. But what would you say the odds are of maybe exceeding that? And is the M&A kind of outlook or pipeline increasing, decreasing, staying the same? Any kind of change in how you're thinking about what you might do this year or next year?

Yes. So, this is Jeff. What I would say -- I know we're guilty of saying it's robust all the time. But we're also guilty of saying that they're lumpy. But really versus six or 12 months ago, this is -- and first it's really, historically speaking, this is one of the best pipelines we really ever had. But for a larger deal, $30-plus-million that blew up at the last part of last year would have ended up being a pretty good year too, at least certainly exceeding the $100 million. Going forward, again, we feel really great about the prospects that are in the pipeline and the deals that are kind of even already signed up to LOI. It just depends on timing, really. And I guess if you look at all of it, it will grow along -- rolling period of time as opposed to counting calendar days, you'll probably still hit the numbers.

Yes. Great. Thanks so much.

Next question, Mike Dahl with RBC Capital Markets. Please go ahead.

Hi. Thanks for taking my questions. Just on the price mix in the quarter. I know there's a lot of moving pieces, and it's hard to be too specific, but can you give us a ballpark sense of kind of the composition of true price versus the moving pieces on mix?

We definitely got price in the quarter. And given the acceleration in single-family same branch revenue being higher than multi-family same branch revenue, just when factoring in those two components, the way that our price/mix is determined, I would say that we got more price than we did mix because of the higher growth rate from single-family.

Okay, helpful. And then, just back on the disposed branch. I mean that, as a standalone, it seems like there were maybe some issues in terms of kind of negative net revenue, negative adjusted EBITDA, pretty big negative adjusted EBITDA that then you're adding back. And I think you called it the process of winding down. Then also said it's behind you. So maybe just a -- like a little more specifically on why the results were so pressured, because that was kind of a big adjustment to the total company results. And then secondly, on a go-forward basis, are there still going to be lingering impacts into the second half here? Just any additional color you could provide would be helpful.

Yes, we expect that the operations will be fully wound down by the beginning of next year, but that going forward, it will have a material impact -- immaterial, excuse me, very important distinction there, an immaterial impact on our results going forward. Part of the reason that the adjustments were so large in this quarter is because we made the decisions to dispose of the location and kind of take care of and clean up all of the issues that were there. This is the, again, a non-core branch completely out of anything else that we do that has, quite frankly, never been profitable.

I'm hesitant to even it a branch. I mean, really, it's product line.

Yes, former branch, so...

Yes. Sure, it's located under branch, but more than that, I think it's really product line in which we don't really participate.

Exactly. And quite frankly, we've done over 200 acquisitions. This is the first time this has happened. I think that's a pretty darn good track record.

Yes. Just as a quick follow-up, since it's being backed out of EBITDA but not gross margin and SG&A, does that imply that your -- the way you report adjusted gross margin and SG&A would have otherwise been higher? And if you could give us a sense for, if that was the reason that -- part of the reason that your SG&A was higher than expected, like did more of the cost flow through that. Any sense of that breakdown?

It was just the table -- I mean, we wanted to try and make it concise enough in terms of the tables that we put in to show the adjustment. But as I said in answer to our previous question, the adjusted gross margin in the quarter, excluding dispositions, would have been 34.9%. So it impacted -- it negatively impacted, basically all lines of the income statement.

Okay, got it. I had missed that comment. Thank you.

Next question, Reuben Garner with Benchmark Company. Please go ahead.

Thank you. Good morning, guys.

Good morning.

So, sorry to harp on this, but just a clarification on the commercial front. Is the run rate of revenue and profit loss that's being stripped out in the second quarter the right way to think about on a go-forward basis, meaning it added $7 million EBITDA to take that business out? Was it losing that much money on a quarterly basis?

It lost that much money in the second quarter, yes. And it is commercial. So, our same branch commercial revenue, excluding the disposition, was basically flat in the quarter and not negative.

Okay. And then, you guys typically compare your volume performance to kind of the completions environment for the two end markets. You guys are not quite national yet. There's some MSAs that you're not in. Is there anything geographical that you would call out that may lead to differences between your performance and the completions environment broadly?

No, I'm glad you had asked that question, though, because I think it's important and we've tried to stress this, is that looking at our same branch revenue compared to completions in any one quarter is not as impactful or useful as looking at it over a longer period of time. So, if you look on the year-to-date for the first six months of the year, our same branch sales grew 4.7%, so call it 5%. And multi-family -- or single-family completions were up about 1%, right? So, that delta of about 400 basis points, that sort of mid-single digit is very consistent with what we've always talked about sort of being at a mid-single-digit number above completions. I will say on the multi-family side right now that; one, as you know, over the past several -- more than several quarters, we've had stellar growth in same branch multi-family sales growth. But I would say, just given the dynamics of what we were talking about earlier about multi-family units under construction, there is going to be, for some period of time, I think, a disconnect between our multi-family same branch sales growth and multi-family completions, until the market normalizes at a more reasonable level, which we think in terms of the units under construction relative to starts, which we think is going to happen maybe late this year, most likely first quarter of next year.

And if I could just sneak in a quick follow-up there, guys. The multi-family impact to mix on a go-forward basis as single-family recovers and multi-family fades. Can you just remind us how that plays out?

It makes the mix component weaker. It's a headwind to the mix because a single-family job can be a 10th of or even a hundredth of what a multi-family job is.

Great. Thanks, guys. Good luck going forward.

Thank you.

Next question, Ken Zener with Seaport Research Partners. Please go ahead.

Good morning, everybody.

Good morning, Ken.

Just a couple of questions here. Given the strength of growth from the large builders and your, I guess, record gross margin adjusted. Can you talk to why that is not a drag, as that happened in the beginning of the pandemic, given your exposure to certain customers, it seems to be somewhat counterintuitive. Can you talk to why that is playing out that way?

Our field team is doing an incredible job of managing production and making sure they're aligning the value of our services with our customers. And, to be honest with you, that gets reflected then in variable compensation, and they're getting rewarded for continuing to do that.

Going back to the period when you had increased exposure in gross margin, you called that out, SG&A leverage at the time. But like, is that -- you talked about not wanting to mess up your customers pricing structure, Jeff, I believe you talked about, well, yes after price, given that experience. It seems like -- is that large builders, you get leverage. However, there's really two of you guys that are still dominant in the service, installation space. Does that really suggest that your pricing discipline i.e., margins is sustainable in that sense. If they don't have a wide variety of bids to choose from, because it does seem to be a rather distinct shift, especially this quarter, given the growth [indiscernible] and you actual stronger gross margins because of that.

Well, this is Michael. I'll start that and Jeff can finish. But there are a lot of puts and takes into gross margin. And while we have strong growth with the big public builders and they are our largest customers, I mean, it is a relatively small percentage of our overall revenue. But I do think that our team has done a great job of trying to align price and cost. And also to be as efficient as possible in the field, which is really beneficial for us. But I would also say that at the local level, there is not just two contractors that are bidding for work. I mean, there is -- it's still an extremely competitive environment. And I would say, old builders, whether they're public or regional and local builder have choices, and we all have to differentiate ourselves on service.

All right.

I mean, I think I understand the question. But I'm going to still give a bit -- I mean, I know our answer that says that we get rewarded for performing. It's a little fuzzy, but I've been in the rooms and there are certain bigger builders that do, I think, really believe that and preach that to their people even more than others would say. So does it mean we get in more highly price-only competitive situation sometimes? For sure. But there's just as many large builders in some of our larger markets that are much more concerned about making sure that they get jobs insulated and past inspections when they need them to keep the volume.

Understood. You talked about -- Michael, you said it could be understood that you got more price than mix given that that's reported a little differently than one of your peers. But is that to say, my calculation -- is that to say price was positive and mix perhaps was negative? Could you comment on just that positive and negative component of that variable?

Both price and mix were positive, right. And if we look at -- my comment was really more that there was more price than mix, but they were both solid.

Thank you.

Next question, Phil Ng with Jefferies. Please go ahead.

Hi, guys. Your commentary on going forward still sounds pretty upbeat. Certainly, housing starts have been a little choppier in the last few months with rates staying a bit more elevated. Now, certainly, we're talking about potential rate cuts. So, I'm just curious, what are you hearing from your customers? Are they managing their business any differently? Are you seeing any slowdown in quoting activity at all?

We're still very busy. I mean, I think it's clear that the growth rate in starts is coming down. The publics that have reported so far, I think their orders are up like 5%, 6%. So, still growth, but not the kind of growth that we were seeing earlier in the year. So, I mean, honestly, a mid-single-digit single-family growth environment is extremely healthy for us and for the industry. And if we continue a multi-year path in that kind of a market, we feel very good about our ability to perform. Clearly, there are significant headwinds as we talked about earlier, relative to multi-family. But if we do get to a stabilized level, based on the current starts, say early '25 as opposed to even back half of '25, we think that creates a more stable operating environment for us and for the industry. And on the multi-family side, again, really allows us to focus on what we're doing very well is gaining market share, not just with insulation, but also with the other products.

And I was going to make that comment, too. I mean we're just, we're a little different than just the general multi-family market, as we said in our prepared remarks, both because we're not penetrated from a geographic perspective, everywhere that we are capable of doing multi-family work yet, and we continue, through one of our operations that has kind of built itself into bidding and quoting and managing machine for those branches, continues to really deliver a great pipeline of projects that we can bid on and hopefully get the work from

Got you. And then, Michael, appreciate you don't guide per se, but I think earlier conversations in the year, perhaps mid-single-digit volume growth for your business organically. I think your comments were, seems plausible and achievable. Appreciating there's a lag in starts and completion cycle times and all that great stuff. Are you expecting volumes to kind of inflect? What kind of path do you see? Is that mid-single-digit framework still a good way to think about it for the full year?

Yes. If we just look at, say, single family, so single-family volumes in the quarter were up mid-single digits.

Okay. But in terms of the broader framework, in terms of your demand overall, is that still a good way to think about the year? Or maybe some moderation, just given some of the drop that we've seen recently.

Yes. I mean, from a volume perspective, where we're going to find some headwinds will be, particularly in the light commercial business. And we expect that that will continue to have -- the light commercial business will continue to have headwinds, really, again through the back half of this year, and should be on a much better footing in '25.

Okay. Can you remind us like how much of your commercial business is light versus heavy, the splits?

Sure. So, roughly 10% of total revenue is light commercial and 7% is heavy commercial.

Okay. Appreciate the color guys.

Next question, Susan Maklari with Goldman Sachs. Please go ahead.

Thank you. Good morning, everyone.

Good morning, Susan.

My first question is on the ancillary products. Can you talk a bit about how they performed in the quarter. And that's something that you've talked about increasingly coming through in the back half of this year. Are we still on track with that? And just how should we think about the implications that we'll have from a margin perspective as we think about the upcoming next several quarters?

Yes. So, the sales growth in the other products was fairly consistent with insulation, although insulation was a tad -- they were consistent, I would say. We would expect that the other products would see, just becoming later in the cycle time that they would see probably higher growth than insulation. I would say, though, that the story, if you will, relative to the other products as it relates to the residential piece of our business of single-family, multi-family, new residential piece of our business that we're continuing to make progress in improving the gross margin in those products. They're still considerably lower than insulation, but we're continuing to make forward progress there. And it's one of the reasons why we think in the near to medium term, as we were saying earlier, that gross margins will probably not grow from here, remain in the 32 to 34 band in the near term, probably makes some sense.

Okay. And then my follow-up is, you did buy some stock this quarter. I think this was the biggest repurchase you've had since 2022. Can you just talk a bit about the decision to do that? And how we should be thinking about perhaps further share buybacks over the -- in the future?

Yes, and we will continue to do it. We believe that as we continue to mature as a public company, and we continue to generate very strong free cash flow that it gives us a lot of opportunities, if you will, from a capital allocation perspective and we feel very confident that we can currently support an even accelerated M&A platform or pipeline of deals above our $100 million target, and at the same time, continue to repurchase shares on a more consistent basis.

Okay. Thank you, and good luck with everything.

Thank you.

Next question, Keith Hughes with Truist Securities. Please go ahead.

Thank you. Just some details on this branch you're getting out of. Are there going to be any appreciable asset sales that you would anticipate from this move to close it?

No, nothing significant. We really -- in fact for the back half of the year, until it's fully disposed that it'll be -- it will have an immaterial impact on results going forward.

And I assume that would include EBITDA, there is something about an unfavorable contract settlement in the language of the press release. Was that all taken care of in the quarter and there is no impact in the second half?

Correct. And that's the reason why the quarterly EBITDA contribution was so negative.

Okay. And what -- can you tell us what product line this is, is you're getting out? I know it's non-core, but specifically what?

It's non-core.

Okay. And, let me see if there's any other -- your discussion on share repurchase. I know you did some in the quarter. Have you thought internally about, in excess of the dividend, who much would go that way? I guess, how are you thinking about it is the question.

Yes. I mean, if you look over the past, say, five years, and from a capital allocation perspective, roughly 60% or almost $550 million went to acquisitions, and 20% or almost $200 million went to share repurchases. And then, about $160 million went to the dividend. So, I think, as we've said, the number one priority will continue to be M&A, then share repurchases, and then the dividend. And as we said in answer to previous question, it's our belief that we will be more consistent in regular share repurchases on a go-forward basis.

Okay. Thank you.

I would like to turn the floor over to Jeff Edwards for closing remarks.

Thank you for your questions, and I look forward to our next quarterly call. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.